We study the portfolio decision of a household with limited information-processing capacity in a setting with recursive utility, which has two key features. First, intertemporal substitution and risk aversion are disentangled. Second, the household has a preference for the timing of the...

Empirical evidence shows that entrepeneurs hold a large fraction of wealth, have higher saving rates than workers, and face substantial uninsurable entrepreneurial and investment risks. This paper constructs a heterogeneous-agent general equilibrium model with uninsurable entrepreneurial risk...